Erp Empires

They are the foundations of modern corporate empires. We take a quick look at the ERP hype and facts.

Some say that Enterprise Resource Planning software is the most unexciting IT front that undergoes the most radical changes. True, to a large extent. The world does not get to see anything on the lines of a browser battle between ERP vendors, or a no-hold barred attack between the UNIX and the Windows camps. ERP hardly dazzles with cutting edge technologies, but even the protagonists of the battles aforementioned cannot do without ERP to effectively run their mammoth organisations.

According to the Price Waterhouse technology forecast for 1997, three companies have captured nearly 60 per cent of the worldwide corporate applications software market. These are Oracle, SAP and Peoplesoft.

However, this may be changing. Companies like BAAN (unheard of two years ago) and QAD are making rapid strides into different niches of the enterprise resource planning (ERP) market worth about Rs 200 crores in India. Here's a quick reckoner on who is offering what. SAP

This product is almost an industry standard, much like Windows on the desktop. It commands 30 per cent of the client-server enterprise applications market. Its R/3 product runs on several UNIX and Windows NT-based operating systems including Hewlett Packard's HP-UX, both IBM's AIX and AS/400 and Sun Microsystems Solaris. It will also use IBM's S/390 architecture in the future. In India, SAP is king with nearly 65 per cent of the market. The Tatas and Samsung Electronics being two of the largest users of SAP here.

R/3's solid integration of its many modules and functions is its greatest strength. It has set a new standard for business information processing as the SAP family of products has the ability to model a wide range of business processes. The R/3 system includes mature business applications and tools. Standard applications are designed using the ABAP/4 (Advanced Business Application Programming) Development workbench which is integrated into the R/3 system.

SAP's industry standard business application programming interfaces (BAPIs) can extend access to business systems over the internet. Any client front-end will be able to access any back-end business system through BAPIs enabling real-time transactions of business systems even if they use different core technologies.

SAP is also responding to customer complaints that they have to devote considerable resources and re-engineer their business processes according to detailed procedures consistent with R/3. Release 4.0 of R/3 will split the tightly integrated suite of modules into 170 components. Though a radical departure from SAP's earlier philosophy, it responds to customers' requirements that they must tie R/3 to other systems to get full functionality. It will also add global supply chain management functions, a key strength of some of its competitors. SAP has also partnered with Microsoft to further its internet strategy.

What others say

SAP currently lacks some desirable functionality, including strong reporting and query functions, forecasting and the ability to configure product allocation and advanced planning capabilities. Though SAP does provide basic data reporting and querying capabilities, it is not sufficient for robust datamining uses. Also ad hoc queries of R/3's approximately 8000-table database are complex as some of them use proprietary formats and it is hard to know where some particular data resides.

SAP R/3 forecasts at the finished goods level, however many computer companies need forecasting at the component or assembly level.

BAAN

BAAN, a company from the Netherlands, has shown dramatic growth in the last two years globally and, in the last one year, in India. It is making its mark through its Baan IV Orgware released in 1996.

Baan IV is an integrated family of manufacturing, distribution, finance, transportation, service, project and Orgware modules. Using the principle of Dynamic Enterprise Modeling (DEM) implemented via its Orgware capabilities, Baan IV enables a company to match its specific business processes with the organisation model using the extensive functionality of BAAN applications.

BAAN IV has a scalable, client-server architecture. It runs on most popular environments including UNIX, Windows 95 and NT and also on all the major databases. It is internet-enabled, but that is a given nowadays. One of BAAN's main claims to fame is its implementation period: Three months to 12 months compared to double that time for SAP. It claims to have implemented a project in 35 days in India strictly no names, please, says BAAN.

Sales forecasting and inventory control makes it ideal for manufacturing companies. It sells mostly to the automotive, electronics, construction and food and beverage industries. BAAN IV Orgware's operations functions are based on graphical tools and best practice models.

Baan also has a well-defined internet strategy. It has partnered with Business@Web and will jointly build and sell internet-enabled applications. These will be based on Business@Web's OpenScape development tools. BAAN supports the ability to do internet-based Electronic data Interchange.

One outstanding BAAN Manufacturing feature is an approach called Customer Order Decoupling Point (CODP). This approach distinguishes different types of production; so companies are able to determine the point at which production changes from standard-forecast production to customer-specific production. Graphical simulations allow analysing the effect of alternative plans on financial requirements, capacity, and inventory.

Also the BAAN Process

software is designed specifically to support the unique requirements of process manufacturers, including multi-dimensional inventory, multiple packaging configurations, shelf-life identification for specific lots and quality management.

The Gartner Group has rated BAAN as a leader with a visionary product and an ability to implement the software. The second assumes significance in India, where speed of implementation matters a lot. BAAN has 11 live sites in the country today.

What others say

Traditionally, BAAN is more strong in manufacturing but not so in its finance modules. However, it has now joined with Hyperion, a company strong in its financial applications. Hyperion finance modules will be included in BAAN's core product for

manufacturing where it is almost a de facto standard. BAAN V is

likely to be released in the quarter of 1997 with Internet enabling technologies.

QAD

QAD in India has one big claim to fame. Hindustan Lever, the country's largest consumer products manufacturer, uses its flagship ERP

product, MFG PRO, to run its entire operations. MFG PRO provides multinational organisations with an integrated global supply chain management solution that includes manufacturing, distribution, financial, and service/ support management applications within an open system environment.

Its main customers include key manufacturing industries within the automotive, consumer products, electronics, food & beverage, industrial products, and medical sectors. MFG/PRO software supports most UNIX and Windows NT environments and is available for Oracle and Progress databases on more than 25 hardware platforms.

MFG/PRO software functions using a Windows graphical user interface (GUI) and a character mode user interface simultaneously.

This comprehensive ERP package supports host and fully-distributed client/server applications. Component-based application development enables flexible and scalable architecture to ensure a sound path for future growth. QAD's time-to-benefit methodology makes MFG/PRO fast to implement and easy to use and maintain. The software is available in 24 languages concurrently.

MFG/PRO's distribution, manufacturing, and release accounting modules, allows companies to easily manage their suppliers and co-ordinate shipping and delivery of components. Customer and supplier information can be integrated quickly and seamlessly, resulting in greater flexibility and reduced lead times and costs. In addition, the planning, financial and electronic data interchange (EDI) modules offer comprehensive planning, scheduling and forecasting, as well as providing real-time information across the entire supply chain. In India, apart from Levers, MFG PRO users include Allan Bradely India, Godrej, Boots Pharmaceuticals, Glaxo, Nicholas Piramal and Ford.

Oracle

Oracle Applications were introduced in the late 1980s and are based on the Oracle 7 relational database management system (RDBMS) which is supported on multiple platforms. The Oracle Applications business unit provides financials, manufacturing, HR and related tools.

Oracle Applications only run on the Oracle 7 DBMS. This is an asset for the company where it can use all the power of its database and tools in its applications. The Oracle database runs on more than 80 hardware platforms and thus provides a high degree of scaleability and platform independence. Oracle's most important customers are large organisations with widely distributed client-server environments.

Oracle Applications are now also available for the Web, designed for secure business transactions across the Internet. Communications between the Web browser and and Web server are protected by Secure Sockets Layer (SSL) data encryption while those between the Web server and applications server use advanced firewall security.

PeopleSoft

After SAP and Baan, PeopleSoft is probably the most well-recognised name in the ERP market in the country. The company sells an integrated suite of client server based applications for accounting, materials management, distribution manufacturing and human resources. But it is chiefly known for its strengths in HR.

Peoplesoft acquired a company called Red Pepper in September 1996 which was developing manufacturing and supply chain optimisation software for the enterprise. This has pushed its HR, payroll and financial applications in the market.

PeopleSoft applications run on DB2, Informix, Oracle, Sybase and SQL Server. It supports various versions of Unix, Windows NT, IBM's OS/2, OS/400 and Digital's VAX and Open VMS. So far PeopleSoft has been using a two-tier architecture for its applications but is now moving to a three-tier one following criticisms from customers who find the two-tier architecture not scalable enough. This will happen in Version 6 which will require clients with at least Windows 95 if not NT.

People Tools is an object based application development and implementation environment that is bundled with

PeopleSoft products. Version 6 will also include Web and EDI interfaces for the company's distribution, financial, HR and manufacturing applications. Until the

Web interface happens, Peoplesoft is using third party tools fromBusiness@Web

Inc. and NetDynamics to support the

use of a variety of front ends including

Web browsers.

However, the biggest boost for EDI is likely to come from its agreements with four EDI and electronic commerce vendors. It will also integrate on-line analytical processing (OLAP) and data analysis tools into its suite.

...and the rest

Apart from these big names there are many solutions in the market like Systems Software Associates (SSA), J.D. Edwards, Avlon and the desi Marshall. Each has its own strengths and weaknesses. Price is primarily a key issue in most cases.

The future

In today's enterprise applications world, one of the fastest growing markets is that of datawarehouses. Application package vendors like Oracle (with its Financial Analyzer), PeopleSoft Inc.

(with Arbor and Cognos) and SAP with its Open Information Warehouse are extending their applications to provide data warehouse add -ons. Almost all are migrating towards integrated suites using client/

server architecture. Internet capability is another aspect which all can ignore only at their own peril.